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U.S. And Iran Trade Attacks in First Major Escalation in a Month; Concerns Mounting About Security of Second Regional Maritime Chokepoint; Google Maps Changes Lake Ontario to Lake America in U.S. Searches; U.S. Army Veteran Pardoned for Crimes That Led to His Self- Deportation; John Galliano Exhibition for 2027 Met Gala Canceled; 950+ Dead, 4,400+ Missing After Catastrophic Nepal-China Floods; Gambling Industry Mobilizing to Fight Prediction Markets. Aired 1:30-2p ET

Aired August 31, 2026 - 13:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(COMMERCIAL BREAK)

[13:33:43]

BRIANNA KEILAR, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": The U.S. and Iran trading new attacks in the first major war escalation in more than a month. Iran firing missiles toward U.S. military targets in Jordan and launching a drone attack on the United Arab Emirates. That came just hours after a U.S. strike on Iranian rocket launchers that CENTCOM says were trying to launch sea mines into the Strait of Hormuz.

BORIS SANCHEZ, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": This renewed fighting happening as the other key regional chokepoint is coming under a mounting threat, the Bab al-Mandab Strait. Houthi rebels in nearby Yemen are threatening to cut off the narrow waterway, potentially opening a new front in the war.

CNN's Nic Robertson got exclusive access today to an island in that Strait. Watch this.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yeah, right now, we're standing on Perim Island, also known locally as Mayun Island. And what you're looking at behind me there is the Bab al-Mandab Strait. And what I can see looking out, looking over that shoulder is Eritrea. What I can see looking out over that shoulder is Djibouti. I see the mountains rising up out of the sea. It's the African continent. And that tells you just how narrow the Bab al-Mandab Strait is.

It's about 10 miles or so across to Africa, 15 kilometers, something like that. What's happening here? There's been a little-known war that's been simmering here in Yemen for over a decade between the Yemeni government and the Houthis.

[13:35:00]

And I think a lot of people don't know much about this conflict. They kind of think that the Houthis are a ragtag force, but they're not. They're Iran's strongest proxy at the moment. They've got hypersonic missiles. They've been hitting Israel.

They've got ship-seeking, sophisticated missiles that can target them from a long distance. And they've been hitting international shipping, Saudi oil tankers, in the Red Sea here, Bab al-Mandab Red Sea up there. So you've got the Houthis with their Iranian sponsors that have been ramping up the war here in recent weeks.

And they're turning what was a local war into a geopolitical one, if you will, that has global consequences. President Trump tries to manage the tensions with Iran by keeping the global price of oil down. This has been permanent for him over the last few months, trying to keep it down, trying to keep it down.

And what Iran is doing is putting pressure and blocking the Strait of Hormuz. What Saudi has done is try to divert its oil, get it out through the Red Sea, get it out down here. You know, a few years ago, 10 percent of the global oil trade came through here, vital for commercial shipping, too.

Now it's down to about half of that. And if Iran continues to push its proxies here and they continue in their operations to try to take the rest of the Red Sea coast, then they would take this place here, Perim Island, Mayun Island. They would take it. That would make shutting off this Strait, the Bab al-Mandab Strait, much, much easier for them than it is right now, hitting ships while they're sort of at sea further north, where the Red Sea is much wider.

So this threat that Iran is sort of putting on the global stage at the moment, right now, by pushing its proxies, the Houthis, to shut off and take control of the Red Sea, shut off the Bab al-Mandab Strait, that potentially has political consequences for President Trump, because, of course, if you shut off this route for oil getting to global markets, particularly Asia, then that's going to drive up the price of oil. And that gives President Trump political vulnerability, particularly going into the upcoming U.S. midterms.

And this really appears to be what Iran is doing at the moment. So you have this huge focus on the Strait of Hormuz, this little-known war here in Yemen. This is the sort of axis of it. This is the crunch point, the vital chokepoint across the Bab al-Mandab Strait here.

KEILAR: Our thanks to Nic Robertson for that. And now to some of the other headlines that we're watching this hour.

Trying to find Lake Ontario on Google Maps? Well, if you're in the United States, it's going to take a while. It's going to take all day, it's going to take all week --

(LAUGH)

KEILAR: -- and so on, because you're not going to find it. Users in the U.S. will now see the lake identified as Lake America on the site. The change came over the weekend after an executive order from President Trump renamed the lake amid his tense trade war with Canada. Google Map users in Canada will continue to see Lake Ontario, as we live in two realities, I guess. Department of Interior Secretary, Doug Burgum saying Trump has also contacted Apple directly about adding Lake America to their maps and says we may see a change coming soon.

And a Korean-born U.S. Army veteran who self-deported last year has been pardoned for the crimes that led to his leaving. 57-year-old Sae Joon Park is among a number of non-citizen U.S. military veterans who self-deported or were expelled from the country they fought for under President Trump's sweeping immigration crackdown.

SANCHEZ: Park's case drew national attention in December when lawmakers pressed then-Homeland Security Secretary, Kristi Noem, during a testy congressional hearing about veterans swept up in this crackdown. Watch this.

(BEGIN VIDEO CLIP)

REP. SETH MAGAZINER, (D-RI): He is a combat veteran, a Purple Heart recipient. He has sacrificed more for this country than most people ever have. Earlier this year, you deported him to Korea, a country he hasn't lived in since he was seven-years-old. Will you join me in thanking Mr. Park for his service to our country?

KRISTI NOEM, THEN HOMELAND SECURITY SECRETARY: Sir, I'm grateful for every single person that has served our country and follows our laws. And knows that our laws to deport that every --

(CROSSTALK)

MAGAZINER: Can you please tell Mr. Park why you deported him?

(END VIDEO CLIP)

SANCHEZ: So on Friday, New York Governor, Kathy Hochul erased two convictions that Park had in the state. Park's attorney says the pardon does not automatically mean he can return to the U.S., but it does give him grounds to have his removal order vacate.

And now, a misfire for the nation's most glam events. Next year's Met Gala exhibition honoring controversial designer John Galliano has been canceled. Galliano issued a statement saying he did not want to be a distraction or, quote, "place the Met in a difficult position." The Met announced their Galliano showing last month, triggering an outcry over past racist comments.

Galliano was fired from Dior in 2011 and found guilty of public insults in France after he was caught on camera saying, I love Hitler and ranting anti-Semitic abuse.

[13:40:00]

The Met said in a statement that a new exhibition will soon be announced.

Still to come, we're learning more about one of the Americans missing in Nepal. One was fulfilling a lifelong mission, a dream, and was about to return home when she was in the building when this wave of water, mud and debris hit. Her husband joins us right after a quick break.

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[13:45:00]

SANCHEZ: Right now, a frantic search is underway in Nepal's hydropower tunnels, where officials believe hundreds of workers are trapped after last week's flood disaster. Their loved ones are clinging to hope that rescuers who are rappelling into the tunnels with ropes may be able to locate them.

(BEGIN VIDEO CLIP)

BHAKTI RAM BOHARA, FLOOD SURVIVOR: Me and my brother-in-law were working in the same tunnel. I lost him. His wife is my sister, and she is pregnant.

AMAR BISTA, TOUR GUIDE AND VOLUNTEER: All the clothes, they lost all the, whatever they have, like they lost their phones, they lost their, like everything they lost, you know.

(END VIDEO CLIP)

SANCHEZ: Right now, more than 4,000 people are unaccounted for, including at least 85 Americans. Sridevi Vejella is one of them. She had just finished a pilgrimage to Mount Kailash in the Chinese region of Tibet and was crossing from China into Nepal when the flood hit.

Her husband, Deepak, learned from the U.S. Embassy that she was stuck inside this building when it was hit by a deluge of water and debris. Satellite images now reveal what has been left behind. As you can see, the building was completely flattened under feet and mud of debris.

Deepak Dandu joins us now. Deepak, thank you so much for joining us. I wish it wasn't under these circumstances.

Your wife obviously had just finished this pilgrimage, something that was a lifelong dream for her. What did it mean for her to go to this mountain in Tibet?

DEEPAK DANDU, WIFE IS MISSING IN NEPAL: Yeah, it was definitely, she was being -- she's been planning since like two years back. Unfortunately, like last year, she couldn't -- she couldn't make it due to some other things.

But yeah, this year, she wanted to book that, she went and booked that, this event. And she was very happy to go there because that was her lifelong dream. And yeah, it's very unfortunate that like she went, has completed her lifelong dream, but on the way back, I think this tragedy happened.

SANCHEZ: How did you first learn that she might be in danger?

DANDU: The first, I think I got a -- I think, yeah, obviously, I was listed as one of the emergency contacts. So I immediately got an email from the group, from the Isha Foundation group that I think these -- the S3 group, she was part of the S3 group and they were present in the building and getting their reintegration done, and when this flash flood event occurred.

So that's how I came to know. And immediately tried to reach out to the authorities to find more details. But yeah, and that was very -- that was very, I mean, since -- right now, if you see the after and before images, I think the building is completely wiped out with a lot of debris.

There are like 40 to 45 to 50 feet high level of debris. So yeah, the latest, I think it's been six days. That's what I heard from the latest from the authorities that the search is still going on and there were no signs of any active or any whereabouts of any of those persons that were in the building when this event occurred. So we're still praying for a miracle to happen. Yeah.

(CROSSTALK)

SANCHEZ: Yeah, they've not been able to find anyone at that site. I wonder what has been going through your mind as you've been dealing with this.

DANDU: Yeah, initially I thought since it's a concrete building, maybe, I didn't know like this was a massive flood, like a massive thing that with debris and all that completely wiped out of the building. I thought like probably they might be stuck in the building since it's a concrete building, maybe they would have -- the building would have hold and they would have stuck somewhere inside and once the rescue comes, they would find them.

But when I was -- when I saw the images that the complete building was blown away by this massive effect (ph), that's where I think, yeah, with all the debris and all that it brought, that it covered, so yeah, slowly we lost hope. But yeah, so nothing has been confirmed directly that, yeah, so, but yeah, so looking at these images and the confirmation that I'm getting from the local agencies. So hoping they are thinking -- we are just hoping like hopefully they got flushed away somewhere down the line and we can find them.

But yeah, we are hoping for the best at this moment.

SANCHEZ: Hoping for the best, no doubt, even under difficult circumstances. Sridevi was traveling with her 13-year-old son. She went to Nepal and he stayed behind in India. I understand that you've now been reunited with him in your hometown. How is he holding up?

DANDU: Right. Yeah, I think he's 13-years-old. I think looking at the circumstances or like the events that are happening around, I think he was able to find out like what's going on. But like, yeah, so he was -- he also completely -- was completely like, he went into the room, locked himself and was crying.

[13:50:00] Like, yeah, so that's what I immediately thought, like it's immediately, I need to start home, go there to support him and give him some level of confidence that nothing is going to happen, at least like let's pray for the best. So yeah, as soon as I came in, I think he was a bit relieved seeing me.

But there are a lot of things going on in his mind right now, which we are slowly trying to get to share all the details to him so that he is well prepared.

(CROSSTALK)

SANCHEZ: Of course, we're looking at a beautiful portrait of your family right now. And I just wonder if you could share with us what Sridevi is like. What do you want people to know about your wife?

DANDU: Yes, she was a great human being. So -- I think lately, like past five to six years, she's been very spiritual. She wanted to like go places, visit all these places. She had a big bucket list. Next year was her 40th birthday and she was planning to go to Mount Everest, not climbing the Mount Everest though, but at least go to the base camp and all. So she was having a lot of plans.

Like yeah, she was a very, very joyful, fun person to be with. Yeah. So she was a lovely, caring person for all of us.

SANCHEZ: Yeah. She certainly seems like it from the images. Deepak Dandu, thank you so much for sharing your story with us. We hope that you get some news soon. Please keep us updated when you do.

DANDU: Thank you, sir.

SANCHEZ: Of course. Thank you.

Stay with CNN, we're going to take a quick break. We'll be right back.

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[13:56:38]

KEILAR: The gambling industry is now in an all-out war with prediction markets. These markets like Kalshi or Polymarket are now a multi-billion dollar industry.

SANCHEZ: Casinos see them as a threat to their business model. One CEO calls the people behind the markets thieves. CNN's Marshall Cohen wrote this story for CNN.com and joins us now.

So Marshall, what are the casinos doing in response?

MARSHALL COHEN, CNN SENIOR REPORTER: They are engaging in an all-out war. That's what one source told me to describe this battle with casinos and sportsbooks on one side and the prediction markets on the other.

So why are they fighting? Well, a lot of people don't realize that prediction markets aren't technically treated like gambling under federal law, even though you can bet on sports and a whole bunch of other stuff. They are regulated by the federal government. That means there's a lot of state laws they don't have to follow and a lot of state taxes that they don't have to pay.

Billions of dollars are on the line and both sides of this battle have built teams of lawyers, spending millions of dollars on lobbyists on Capitol Hill. There are dozens of lawsuits across the country. The casino industry backed a very successful lawsuit that clinched an important victory just a few days ago on Friday where a federal appeals court ruled that states can go ahead and treat these companies like gambling.

Won't be the final word, it is probably going to go to the Supreme Court, but a big victory nonetheless. But guys, I was in Las Vegas a few weeks ago to talk to some of the casino executives and the state regulators over there, and they think they've got the momentum.

Let me read for you a quote from one of the casino owners, Derek Stevens. He runs the Circa Resort and Casino, and this is what he said. He did not mince words. Quote, "A couple nerds came up with this idea to avoid paying taxes. Just because they're shrewd doesn't mean that they should be exempt from the law. These are thieves, they're pirates, and they're marauders." That was his perspective.

We reached out to Kalshi, the biggest prediction market in the country, for their view. They had a very different view. Here's their top lawyer, Rick Heaslip, with his thoughts.

(BEGIN VIDEO CLIP)

RICK HEASLIP, KALSHI GENERAL COUNSEL: They've been turning to litigation. They've been turning to threats rather than innovate. They're just trying to go to the courts. There are enough sports to go around. It is not our position that they need to follow our regulatory structure. They can continue to have their sportsbooks, and we can continue to have sports prediction markets.

(END VIDEO CLIP)

COHEN: All right, so the fight continues there. And, of course, just for full disclosure, CNN has a partnership with Kalshi. We use their data to cover major events, but they don't influence our coverage, and we don't trade on prediction markets.

KEILAR: Yeah. And, Marshall, there's also this news, which we teased earlier today, about Kalshi banning someone for the first time ever, and it's someone that I think our viewers are going to be familiar with.

COHEN: George Santos --

SANCHEZ: Of course.

COHEN: -- the disgraced former Congressman. He was expelled from Congress. He went to prison. He got a commutation from Trump, and now he's banned for life from Kalshi for allegations of insider trading.

They said they did an investigation, they determined that he was placing insider bets on whether he was going to be at the State of the Union. He was tweeting about it, saying he was going to be there, cashed out his position, made some money. He denies wrongdoing.

He's now engaging in his own war with the prediction companies, saying that they are terrible and they are predatory. But, yes, the first time ever that they have banned someone for life, George Santos.

SANCHEZ: I think we've got to launch an investigation into how Marshall Cohen got CNN to pay for him to go to Vegas.

KEILAR: I was going to say the exact same thing.

SANCHEZ: Yeah. I'm in Vegas to interview regulators.

COHEN: Right.

SANCHEZ: The real pirate and marauder right here. Marshall --